Oprah Unbound

After 25 years, Chicago’s Media Queen builds a bigger business and charitable empire, dabbles in politics, and strikes out for the West. Can $2.7 billion buy happiness?

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Launching her satellite radio channel in 2006

THE BRAND

Her message is simple: “You are responsible for your own life.” According to Fortune, this is as consistent a selling proposition for Winfrey “as McDonald’s convenience or Wal-Mart’s ‘everyday low prices.’” The business empire that Winfrey has built for herself follows that same message: Over the years, she has formed alliances only when necessary—which means she has made very few.

The first was with the Chicago entertainment attorney Jeffrey Jacobs, who recalled Winfrey walking into his office once wearing an A.M. Chicago T-shirt and flip-flops, asking if he could set up a syndication deal for her. In 1986, they formed Harpo Productions (“Oprah” spelled backward), and Winfrey gave Jacobs 5 percent of the company. Three years later, Jacobs became the chief executive officer of Harpo and was given another 5 percent. Other alliances were made with the TV syndication company King World to distribute her shows (1986); the ABC network to air Oprah Winfrey Presents, her made-for-television movies (1997); Hearst to publish O, The Oprah Magazine (2000); and XM Satellite for the Oprah and Friends radio channel (2006).

The core of the business is clearly the television show, what Winfrey’s longtime companion Stedman Graham once called her “power base.” It airs in more than 130 countries (including a popularity in Saudi Arabia), and it produces the most revenue. Also, The Oprah Winfrey Show drives the audience for her other endeavors: television movies, magazines, Web site, and spinoff publications such as cookbooks and a DVD collection of her greatest shows. Unlike that other empire builder, Martha Stewart, Winfrey has always refused offers to take her company public. Owning herself, she believes, is to be herself.

But things have not always gone smoothly in the empire. In September 1994, Winfrey’s longtime publicist Colleen Raleigh left Harpo Productions, and two months later, she filed a lawsuit seeking $200,000 in back pay and severance. In a press release, Raleigh spoke of the “dishonesty and chaos” prevalent at Harpo; she also indicated that she felt trapped in a power struggle between Winfrey and Jacobs. Raleigh’s suit was settled out of court for an undisclosed amount, and by the time Fortune wrote a profile of Winfrey and Harpo Productions, all seemed well between the star and her chief executive officer. But soon after, Jacobs quietly left Harpo. According to some sources, a rift had started when Winfrey stopped using Jacobs’s wife as her fashion assistant; by 2002, when Jacobs was in the middle of a divorce, Winfrey felt it was time to move on. She picked Tim Bennett, a former ABC executive, to become president of Harpo Productions.

In May 2008, The New York Times suggested that the Queen of Media’s crown was becoming slightly tarnished—an accusation that Bennett vigorously disputed, noting that Winfrey’s audience remains a third larger than that of her closest competitor, Dr. Phil—starring Phil McGraw, who was introduced to the world of television by Winfrey in 1998.

Still, Winfrey’s daytime audience has dropped from a peak of nearly 9 million viewers in 2004-2005 to 7.3 million now. Her winter 2008 ABC prime-time reality series, The Big Give—in which contestants race to see who can give away the most money creatively each week—started out with high ratings, but they declined every week. ABC announced that The Big Give was set for a slot in its fall schedule this year, but Winfrey withdrew the show. The circulation of O, The Oprah Magazine is down slightly from its 2004 high of 2.7 million; the publication faces the future with a new editor, Susan Reed, after the eight-year reign of Amy Gross. One possibility for the drops, besides Winfrey’s endorsement of Obama, could lie with her recent book-club pick of A New Earth, by Eckhart Tolle. Embracing New Age spirituality, A New Earth had incurred the wrath of some Christian fundamentalists.

“She is seeming to endorse a kind of spirituality that can be offensive to traditional Christians,” says Peck. “And, again, we’re seeing a reaction against her about this on her Web site. But you have to remember, it is the Web—so we don’t really know if these people writing negative e-mails are Oprah’s long-standing fans or an angry group targeting her.” Some possible future concerns, according to Peck, include the idea “that perhaps the brand of Oprah isn’t as new and exciting anymore. And also, her audience—female, white, and college-educated baby boomers—is getting older. So it may not be anything personal about Oprah; it may just be that these people are watching less television. Or maybe there isn’t an infinite life even for a celebrity like Oprah Winfrey.”

“No, the power of Oprah is still full force,” says Bill Zwecker, an entertainment writer for the Chicago Sun-Times. One industry insider points out that while The Ellen DeGeneres Show is gaining viewers, Winfrey’s show regularly outdraws DeGeneres’s when the two go head-to-head. Winfrey’s 2008 show with “the pregnant man,” a female-to-male transsexual who was carrying a child, drew an audience a third larger than the season average. Yet Winfrey’s involvement in her radio channel has been minimal—her on-air presence is required for only 30 minutes a week for 39 weeks a year. And her radio contract expires in 2009, leaving her an easy way to exit the medium if she so desires. The biggest project on her horizon is the start-up of OWN: the Oprah Winfrey

Network, a cable-television channel being created jointly with Discovery Communications. A press release from Harpo Productions explains that the channel will be “designed to entertain, inform and inspire people to live their best lives.” Among the players will be Winfrey’s gal pal Gayle King and the Chicago interior designer Nate Berkus. OWN is expected to begin broadcasting by the end of 2009. The Oprah Winfrey Show will remain on ABC.

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“Love is in the details,” Winfrey is fond of saying. And a good example of that is The Oprah Store. The 5,500-square-foot boutique, situated across the street from Harpo Studios in the West Loop, opened in February 2008, and most of the proceeds go to Winfrey’s charitable foundation, the Angel Network. The store contains 900 of Winfrey’s “favorite things,” from baby onesies with the “O” logo to silk-covered journals for recording your passions. There are tea sets for two, workout clothes, and pajamas; in a corner called “Oprah’s Closet,” Winfrey’s discarded designer clothes (typically ranging in size from 10 to 12, and shoes in size 10) are sold. This is the perfect place to pick up a used Prada skirt ($400) or Ferre boots ($300) once owned by Oprah, a chance to walk in her shoes. Judging by the sayings on the inspirational “O” T-shirts, there is a chance to read her mind, too. LOVE WHAT YOU'VE GOT, says one shirt. Another: WHAT YOU DO TODAY CREATES EVERY TOMORROW. These are some of her guiding lines, and knowing them, following them, and selling them is part of her authentic self. This is her realm.

Photograph: Larry Busacca/Wireimage/Getty Images

This article appears in the December 2008 issue of Chicago Magazine.

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